Remarks by Commissioner Harold Furchtgott-Roth
Before the Media Institute
November 17, 1998

Introduction

The topic of this speech is the so-called voluntary standards.

I cannot mention the word "volunteer" without thinking of Tennessee. In East
Tennessee, children don't grow up learning to say "Ma" and "Pa" but rather "Go
Vols!"

It is a great week to have followed Tennessee football, although perhaps not
the women's basketball team. Tennesse football has now been ranked number one
for two weeks in a row. In nearly 40 years of following the team, this has never
happened before. And probably won't happen for another 40 years.

I have vivid memories of my public elementary school in Knoxville in the
1960s. I don't recall so much the three "Rs" as I recall bible reading, patriotic
songs, and, at every turn, the distinction between good and evil, right and wrong.

In my school, there were no grays of moral relativism, only the sharp and
brilliant colors of goodness. And one of the highest forms of goodness that an
individual could achieve was volunteerism.

Volunteers were a noble class, not by birth or genetics, but by personal
rectitude, a noble class accessible to all. Its nobility was only reinforced when that
class became the mascot of the local university.

To be a volunteer was to be selfless, to take on additional responsibilties
without compensation. Indeed there could be no reward, not even recognition for
volunteerism. At least not in this life.

Volunteerism often involved risks, success was never guaranteed. Tennessee
got its nickname from the large number of men who "volunteered" to fight in various
wars, particularly the Mexican-American War, many never to return.

Volunteerism is aspirational. It is choosing to do good when it would be
more convenient not to. It is a moral act not by compulsion but by volition.

There are different types of volunteerism. Perhaps the highest form is
completely anonymous. It is not pointed out or suggested by others. It is the
proverbial helping the little old lady across the street, a lady who you do not know,
and who you will never meet again. An act of kindness that is not witnessed nor
recorded. An act of goodness that is never mentioned, that will live in no person's
memory but only in eternity.

Anonymity is important for volunteerism. One can enter volunteerism at free
will, and one can leave volunteerism at free will. It is a two-way street. No one
other than the people who volunteer actually know who the volunteers are. There is
no binding contract for volunteerism, no enforcement mechanism beyond a sense of
honor, duty, and pride.

Volunteerism is non-compulsory. Compulsory behavior is the opposite of
voluntary. Compulsory behavior is not a moral act, a choice of right over wrong. It
is not aspirational. It is not selfless. It is not anonymous. Indeed, corcion destroys
not only volunteerism but all value and merit in individual action. In a world of
compulsory behavior, there is no clear distinction between good and bad behavior.

At a tender age, perhaps ten, I first heard a shattering phrase: "In the military,
never volunteer." It hurt my idealistic ears to hear that not everyone thought
volunteerism is a good thing.

It seems in the military that volunteers are called for only when miliatry law
prohibits coercion. Volunteerism is often based less on chivalry than on limitations
of military law.

Volunteerism in the military is not a two-way street. When you volunteer to
join the military, you oblige yourself to service for years. You cannot simply walk
away tomorrow. Once in the military, volunteering means binding obligation.

But here we are in Washington, not in Tennessee. Not in the military. Here,
volunteerism is a federal program costing hundreds of millions of dollars.

If only it were money. It is more the coercion that frightens me. Coercion
outside of the direct rule of law. Coercive behavior in Washington has an ironic
euphemism: "voluntary standards."

I am sure that many of you, coming from the media industry, are all too
familiar with this special breed of laws. Voluntary standards are a favored tool at
the Federal Communications Commission.

My thesis about voluntary standards is two-fold. First, voluntary standards
are neither a product of free will, nor are they merely exemplary. In other words,
they are not voluntary, and they are not standards.

Second, when coupled with broad agency discretion in other matters
concerning the regulated parties, voluntary standards provide a dangerous
mechanism for the evasion of statutory limits on delegated authority. Evasion of
limits on agency authority is a threat to the rule of law and to the principle of limited
government, both of which are essential to a free society. Worse, the use of these
standards may involve constitutional violations.

Voluntary Standards Are Neither

Often, it helps to step back and think about what people are really saying
when they use certain words. When we do so, we sometimes learn that the actual
meaning of the terms and the accepted understanding of them -- the "spin" -- are
worlds apart.

Let's consider the etymology of the phrase "voluntary standard." According
to my dictionary, the adjective "voluntary" means "performed, made, or given of
one's own free will" and "acting of oneself, not constrained, impelled, or influenced
by another." There is even a legal definition for all of the lawyers here: "acting or
done without any present legal obligation to do the thing done or any such obligation
that can accrue from the existing state of affairs." (Webster's Third New
International Dictionary (1961)).

The original derivation of the noun "standard" is from the German term for
"rallying place" or "flag to mark a rallying place." Today, it has come to mean
"something that is established by authority, custom, or general consent as a model or
example to be followed."

Thus, to meet the actual definition of a voluntary standard, an exemplary or
suggested, but not definitive, approach to certain conduct -- that is, a starting point
or "rallying place" for behavior -- would have to be undertaken as a matter of free
will, without its selection being constrained or influenced by anyone outside the
selecting group. Models, not baselines, for behavior would be created, adopted, and
adhered to in the absence not only of current legal obligations to do so, but also of
future legal obligations that could be imposed -- as the dictionary says, "without . . .
any obligation that can accrue."

The First Amendment is premised on a healthy skepticism toward
government-supplied descriptions of official action. In the mind of the Framers, the
"fourth estate" would always be free, under the Free Press Clause, to supply its
own characterization of such action and to challenge the government's, and the
citizenry would be at liberty, under the Freedom of Speech Clause, to ventilate their
opinions about those matters politic. Such freedoms would, hopefully, serve as a
check against the incentive of those in authority to seek to control public criticism of
their decisions and thus to perpetuate their power.

Perhaps now more than ever, however, the language of government is the
language of euphemism, as Robert Corn-Revere, the Chairman of your First
Amendment Advisory Council, has observed in his refreshing essay, "Voluntary"
Self-Regulation and The Triumph of Euphemism. Quoting Orwell, Corn-Revere
explained that this language is used to "make lies sound truthful and murder
respectable, and to give the appearance of solidity to pure wind."

But even taking the government at its own choice of words -- in this case,
"voluntary standards"-- the FCC's regulatory efforts fail to qualify as the "sound-good, feel-good" mechanisms they purport to be. They don't even live up to their
spin.

Too many examples of supposedly voluntary commitments come to mind:
broadcast ratings systems for v-chips; promises, such as free cable access for
schools, in "social contracts" for cable operators as consideration for the resolution
of rate complaints; the airing of children's programming in exchange for waivers of
broadcast ownership rules; the performance of conditions attached to
telecommunications merger reviews; financial payments to the government by
broadcasters for the dismissal of indecency filings; and compliance with
unconstitutional employment "outreach" regulations and reporting requirements.
The list is long, and those are only the publicly made commitments.

For speakers of ordinary English, none of those pledges could fairly be called
voluntary. As two respected administrative law commentators, Professors Davis
and Pierce, have observed, even agency statements that purport to be nonbinding can have coercive effects through more subtle, less formal means. To the
extent that an agency possesses significant discretionary power over a class
of regulatees or beneficiaries, many are likely to "comply" "voluntarily" with
an agency's "nonbinding" statement of its preferred policies.

(Davis & Pierce, I Administrative Law Treatise 232 (3d ed. 1994)).

Each of these so-called voluntary standards, if done in a truly voluntary and
resolute manner, might be considered a righteous act. But done by government
coercion, or at government suggestion with government scrutiny, these acts cease to
be either voluntary or righteous; they remain resolute only in their fear of
government coercion.

In each of the aforementioned cases, the regulatees' promise of performance
was made in the face of potential adverse action by the FCC in licensing, rate
regulation, or enforcement matters. What regulated entities saw when they looked
down the barrel at the agency was: possible denial of their license renewal
applications; denial of applications to transfer licenses; orders of rate refunds; orders
of divestitures; and monetary forfeitures.

Even when the FCC had limited jurisdiction, as with respect to the ratings
system, where our role was limited by statute to determining whether that system
was "acceptable," broadcasters were faced with the explicit statutory alternative of
outright government regulation if they failed to produce an agreement. That in itself
is a harm that industry would strive to avoid, and indeed did.

Circling back to the definition of voluntariness, in none of these scenarios did
the regulatees "act of theirselves." In each instance, the regulatee's dance partner
was the government: like Fred and Ginger, each step they took was cheek to cheek,
made either in response to, or in anticipation of, a move by the government. Can it
be doubted that the regulatee's every choice of maneuvers was influenced, limited,
or affected by the government? And while perhaps executed without any presently
existing, direct obligation, they were carried out not only under indirect pressure but
surely also with the knowledge that failure to do so could lead to the accrual of
express obligations.

As I said in the v-chip proceeding, once the government becomes involved in
pressuring parties to take part in any particular program, the program ceases to be
"voluntary" in any real sense of the word. Participation on pain of governmental
penalty is simply not willing participation.

Nor can the criteria decided upon in the above examples be termed
"standards." When backed by the regulatory authorities, linguistically soft
"guidelines" quickly harden into minimum rules of behavior.

As Judge Lawrence Silberman, writing for the D.C. Circuit, recently held,
even "screening device[s] . . . create a strong incentive to meet the . . . goals" stated
therein. "No rational firm--particularly one holding a government-issued license--welcomes a government audit. . . . In order to avoid the inconvenience and expense
of being subjected to further review, [regulatees] will treat . . guidelines as 'safe-harbors.'" (Lutheran Church-Missouri Synod v. FCC, slip op. at 17.)

For example, are broadcasters going to offer less than 3 hours of children's
programming per week, the current "processing guideline" offering "nonmandatory
guidance," as the Commission called it, on compliance with the Children's
Television Act of 1990? Only if they wish to engender stricter scrutiny by the
Commission.

Evasion of Statutory Limits and the Constitution

So the phrase "voluntary standards" is, even by the government's own terms,
a misnomer. But what is substantively wrong with this administrative mechanism?
What is it that the misnomer seeks to obscure?

The use of voluntary standards allows administrative agencies better to skirt
statutory limits on their authority, an offense to the concept of administrative
agencies in possession of only those powers delegated to them by Congress. Their
use can also more readily permit agencies to impose requirements violative of the
Constitution.

It is no coincidence that the commitments extracted from regulated entities in
the guise of voluntary standards tend to be things that the agency lacks statutory
authority straightforwardly to require. Voluntary standards, as opposed to duly
promulgated rules, can all too easily be used to bootstrap jurisdictional issues: got
jurisdiction to approve or disprove the transfer of licenses but no express statutory
authority to require unbundling of the licensee's product offerings? Just make it a
"optional" condition of the license transfer, add water, mix, and you have fresh
jurisdiction to regulate a whole new area.

The problem with this approach, however, is that it renders superfluous
Congressional attempts to delineate our areas of responsibility. When unelected
federal regulators are not bound by specific Congressional delegations of power,
governmental accountability, principles of federalism, and the rule of law are
thwarted. And each time this happens, we are all a little less free.

The agency may not only be seeking to impose conditions that exceed its
statutory authority. The conditions might be unconstitutional to boot. As with the
commitment to provide children's programming that arose out of the FCC's
consideration of the 1995 CBS/Westinghouse application for transfer of control, the
Commission might seek to require indirectly the very sort of content-based
commitments that it may well suspect the First Amendment cordons off from its
reach. And each time this happens, we lose some freedom of speech.

Voluntary standards are tempting to regulators for technical reasons too.
They allow agencies to bypass the seemingly cumbersome and time-consuming
requirements of the Administrative Procedure Act, such as notice and comment.
These procedures, however, were designed and enacted into law in order to provide
some measure of accountability and reasoning in agency decisionmaking. When
effectively binding rules -- which, as I have argued, is what "voluntary standards"
are -- are adopted but these procedures are not followed, the safeguards of the APA
are violated.

There is another reason that agencies might prefer voluntary standards to
rules: they are harder to challenge in a court of law. Judicial review of the statutory
basis for "voluntary" standards may be difficult to obtain because such guidelines,
being technically non-binding, may never formally be announced or enforced against
any regulatee. Indeed, the agency's "suggestions" may be entirely unwritten,
emanating from ad hoc discussions between regulators and the regulated. For these
reasons, procedural problems of jurisdiction and of justiciability may arise for
plaintiffs who try to challenge administrative arm-twisting.

Moreover, while regulatees who are the subject of retaliatory adverse action
for failure to accede to the agency's wishes will have certainly have standing to
challenge that action, as opposed to the standards themselves, success in that
endeavor will be hard to come by. It is not easy to prove retaliation as a factual
matter. And as long as the agency articulates a contemporaneous, reasonable
explanation for its decision, courts are generally required to defer to the agency.

Thus, by issuing "voluntary standards" in one area while wielding tremendous
discretionary authority over industry in others, the agency can obtain indirectly
guarantees from regulatees that it lacks substantive authority to require directly or
which would likely violate the Constitution if that were done -- all the while
increasing insulation of its actions from judicial review.

Regulated entities should not be put in the untenable position of being asked
by those with potential power to regulate their businesses out of existence to "agree"
to certain rules of conduct that would be unlawful if promulgated formally. In the
interest of fairness and accountability, I believe that the Commission should adopt
rules, as opposed to nominally non-binding "standards" or "guidelines," whenever
possible.

If our statutory authority to prescribe certain rules of conduct is dubious,
covered entities should have the opportunity to challenge the legal basis for any
such rules in a court of law. We should not resolve doubts about statutory authority
by issuing nonbinding documents rather than rules. We should either not act at all,
or act through established rulemaking processes, with notice and comment, and then
defend our position. But we should not leave regulated entities with decreased
opportunities for judicial review of the standards but effectively bound to comply
with them.

By avoiding procedural mechanisms such as "voluntary standards," we could
help, as legal scholar Lars Noah put it, to "push administrative bargaining out of
complete darkness and, if not into the sunshine, at least into the shadow of the law."
(Lars Noah, "Administrative Arm-Twisting in the Shadow of Congressional
Delegations of Authority," 1997 Wis. L. Rev. 873, 941)).

Conclusion

In the end, though, what makes the above-described administrative arm-twisting work is the repeat-player nature of most regulated entities. They know they
will have to deal with regulators not just once, but over the course of many
decisions about their very livelihood. The pressure to go along to get along can be
powerful.

I understand that pressure. Yet I would give the media industry an admittedly
unsolicited piece of advice to place on the other side of the scale: the broad
discretion that you bargain away to your friends today will almost certainly be used
against you by your foes tomorrow. In the long run, negotiating when the law is on
your side may be more harmful to your interests than the immediate regulatory evil
you seek to avoid.

But it is the Media Institute that is uniquely situated to take a stand against
the subtle, but nonetheless real, effects of administrative arm-twisting. It has no
government licenses to lose or sanctions to avoid, only people to persuade.

As Americans, we join many voluntary groups: civic, social, religious,
charitable, and others. In the last century, DeTocqueville was amazed at the
capacity of Americans to join voluntary groups. Through these groups and our own
initiative, we engage in many voluntary activities -- not as the result of coercion or
government enforcement, but through personal commitments. The Media Institute is
one such organization.

In this regard, the Media Institute is a striking symbol of the byproducts of the
constitutional principles that it so vigorously defends. It is the First Amendment that
protects the associational rights of the members of the Media Institute to convene
likeminded persons for the purpose of advancing their ideas. It is the First
Amendment that protects the Media Institute from government impingement upon,
or retaliation for, the statements that it makes in pursuit of those goals, however
critical of government or individual decisionmakers they may be. Without the First
Amendment, we might not have a Media Institute: its ideas might be "too
dangerous," or its voice "too loud."

And without the Media Institute, we would not have a First Amendment
discourse in government that is as meaningful as it is. Thank you for the good work
that you do, for your vigilance and thoughtfulness on the issues that surround the
regulation of communication. Please keep it up.